First rights

In the United States, we have a funny little document called the Bill of Rights. This document is an attachment to our Constitution and outlines the rights we have living in the United States.

It's appropriate that we look at this now, it being around our national birthday celebration - July 4 the day known for when our forefathers stated that what was formerly known as a British colony was now going to be an independent country - and then they went off to kick English butt.

The Bill of Rights came a while later -1791- but it is a document almost any American can refer to when making a comment, publishing a newsletter, or generally living life. Perhaps the most famous amendment -- Charleton Heston aside - is the first, which is commonly known as the right to free speech:

"Congress shall make no law respecting an establishment of religion, or prohibing the free exercise thereof or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances. "

Now the U.S. government has fought for and against this specific amendment in a myriad of ways. The most futures industry applicable attempt to curb the power of this amendment has been by the Commodity Futures Trading Commission (CFTC), always seemingly the guys wearing the black hats unless there's a global financial meltdown. Although most futures folks are familiar with the case, Taucher et al. v. CFTC et al., only recently has it had its day in court.

As I write this, we await the Federal court judge's decision. If the judge decides for Taucher et al., it means the CFTC will need to rethink its registration policy of informational-only commodity trading advisors (CTA). This is a new group: those who don't trade money, but only sell trading advice via some format, be it the Internet, a newsletter or software (see "Licensing v. the First Amendment," by Senior Editor Carla Cavaletti, page 72). These are not the people - or real CTAs - who actually manage money. Real CTAs are those who take your money and trade it, like a portfolio or mutual fund manager. Taucher et al. are simply the guys who put their ideas out there, and let you make a choice whether to take the advice or not.

At Futures, we've been fairly vocal about what we believe is a wrong decision by the CFTC to regulate this group. Although making it a First Amendment cause celebre might be overkill, it may be the only way to make the CFTC understand that it can't regulate stupidity. Curbing what people can and can't say is not only time consuming, it's a silly way to spend my tax money.

Further, if it's a way to keep track of who is distributing information, then that rule should be across the board. Stock newsletters, which were given the bye from the Supreme Court, should be folded in. Of course, I don't want that, nor does anyone. If the CFTC really is trying to curb outlandish comments, such as some advertised, there are fraud laws to handle that.

Perhaps both sides have cried wolf much too long, but the CFTC, as a government agency, should be the first to step aside. After all, it's our national heritage.

E-mail me at gszala@futuresmag.com